Apr 16, 2018

Texas Supreme Court Opinion Summaries — 4/13/18

As promised, here are the summaries of the 10 opinions the Court issued on Friday. Six of the opinions are in argued cases, so the Court now has 41 remaining cases to decide. The decided cases were from October, November, December, and January. There is now one case left from the October argument sitting, three from the November sitting, five from the December sitting, and nine from January.

No. 14-0721, USAA Lloyds Co. v. Menchaca — As mentioned on Friday, the Court withdrew its opinion from last April and replaced it with a highly fractured set of opinions. The primary issue in this case is "whether the insured can recover policy benefits based on the insurer’s violation of the Texas Insurance Code even though the jury failed to find that the insurer failed to comply with its obligations under the policy." In the first opinion, the Court held that such a claim can be viable, and remanded the case for a new trial. On rehearing, the issue is the procedural effect of the Court's holding based on the questions submitted to the jury. Although no approach commands a majority, a majority of the justices agree that the case should be remanded for a new trial. Justice Boyd's plurality opinion announces the judgment of the Court and explains the disposition. Chief Justice Hecht filed a concurring opinion and Justice Green filed a dissenting opinion joined in its entirety by Justice Guzman and Justice Brown and joined in part by Chief Justice Hecht. That portion joined by Chief Justice Hecht, Justice Guzman, and Justice Brown is a plurality opinion. Justice Blacklock concurred in the judgment, but did not join any opinion. And Justice Johnson did not participate in the decision. Clear as mud? Good.

No. 15-0155, Endeavor Energy Resources, L.P. v. Discovery Operating, Inc. — This is the first of two cases addressing retained-acreage clauses in oil and gas leases. The clause at issue in this case provides that after the primary term, even if the lease is not held by production, the lease does not terminate as to "certain lands within certain governmental proration units 'assigned to' a producing well." In a unanimous opinion by Justice Boyd, the Court noted that retained-acreage clauses "come in many different shapes, sizes, and forms" and must be construed in light of the regulatory context and specific lease language. Applying those principles, the Court concluded that the clause at issue maintained the lease only as to the specific acreage assigned to the wells in plats filed with the Railroad Commission.

No. 15-0935, XOG Operating, LLC v. Chesapeake Exploration, LP — This is the second retained acreage case. In a unanimous opinion by Justice Hecht, the Court applied the principles articulated in Endeavor Energy and held that a clause that retains acreage “included within the proration unit for each well… prescribed by field rules” preserves the lease as to acreage set by field rules, not acreage assigned by the operator.

No. 16-0107, Hill v. Shamoun & Norman, LLP — In this attorney-client dispute, the attorney claimed he had an oral contingency-fee agreement with his client. Because oral contingency-fee agreements are not enforceable, the attorney sought to recover under quantum meruit, but argued that the fee should be the percentage from the oral contingency-fee agreement. In a unanimous opinion by Justice Green, the Court held that even though the oral contingency-fee agreement is not enforceable, the attorney can still seek to recover under quantum meruit. But the Court held that the expert testimony about the amount of the quantum meruit fee was legally insufficient because the expert simply opined that the fee should be the percentage from the unenforceable contingency-fee agreement. Because there was some evidence of the reasonable value of the attorney's services, the Court remanded the case for a new trial on the quantum meruit theory.

No. 16-0120, Painter v. Amerimex Drilling I, Ltd. — In this personal injury case, an employee of respondent Amerimex Drilling was driving himself and other employees from the drilling site to a bunkhouse after their shift. The driver fell asleep and the vehicle rolled. The issue was whether the employer can be vicariously liable for the conduct of the driver. The trial court granted summary judgment in favor of the employer and the court of appeals affirmed. The primary issue on appeal was whether the plaintiffs were required to show that the employer controlled the driver's conduct during the trip as part of the respondeat superior analysis. In an opinion by Justice Lehrmann (joined by Chief Justice Hecht, Justice Johnson, Justice Guzman, Justice Boyd, and Justice Devine), the Court held that the right-to-control issue should be limited to cases involving independent contractors. The Court concluded that once there is sufficient evidence of control to find an employer-employee relationship (which the Court says was conceded here), then there is no reason to re-evaluate the right of control on a task-by-task basis. The court then concluded there was some evidence that the driver was acting within the course and scope of his employment when the accident occurred, precluding summary judgment. Justice Green filed a dissenting opinion (joined by Justice Brown). The dissenters would have held that even if the driver was an employee while at the drilling site, determining whether he was employee while driving the workers away from the site requires a right-to-control analysis. Essentially, the majority and dissent disagree about whether employment is determined on a task-by-task basis. The dissent argues that the driver could be an employee while at the drill site, but an independent contractor while driving the other workers away from the site after their shift. (Justice Blacklock did not participate in the decision.)

No. 16-0498, Jefferson County, Texas v. Jefferson County Constables Association — In this employment dispute, the issue is whether deputy constables are "police officers" with the right to enter into collective bargaining agreements under Chapter 174 of the Texas Local Government Code. If so, then the question is whether, in an arbitration under the bargaining agreement, the arbitrator exceeded his authority. In an opinion by Justice Lehrmann (joined by Chief Justice Hecht, Justice Green, Justice Guzman, Justice Devine, Justice Brown, and Justice Blacklock), the Court concluded that deputy constables are "police officers" within the meaning of Chapter 174 and held that the arbitrator did not exceed his authority. Justice Boyd filed a dissenting opinion (joined by Justice Johnson) concluding that deputy constables are not "police officers."

No. 16-0897, Neighborhood Centers, Inc. v. Walker — A former teacher at an open-enrollment charter school sued for relief under the Texas Whistleblower Act, claiming that she had been fired for reporting various issues to state agencies. The Whistleblower Act prohibits local governmental entities from retaliating against employees for reporting a violation of law by the employer. The issue in this case is whether an open-enrollment charter school is a local governmental entity for purposes of the Whistleblower Act. In an opinion by Chief Justice Hecht, the Court concluded that the Whistleblower Act does not apply to open-enrollment charter schools because the Texas Charter Schools Act does not include the Whistleblower Act among the statutes for which open-enrollment charter schools are considered governmental entities. Justice Johnson filed a concurring opinion to express concern that the Court's opinion includes some overly broad language about the Legislature's ability to grant governmental immunity. Justice Blacklock did not participate in the decision.

No. 17-0197, In re Elizondo — This mandamus proceeding addresses the application of the Court's decision in Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001), regarding finality of judgments. In Lehman the Court held that a judgment is final (1) if it includes language stating that it disposes of all claims and all parties and is final and appealable or (2) if it actually disposes of all claims and all parties. In this case, the trial court entered an order that mistakenly stated that it disposed of all claims and all parties and was final and appealable. More than 30 days later, the plaintiff filed a motion to amend the order, which the trial court granted. In a per curiam opinion, the Supreme Court conditionally granted the request for a writ of mandamus to vacate the amended order because the trial court had lost plenary power. Because the order said it disposed of all claims and all parties and was final, the Court held that the trial court lost plenary power 30 days after the order was entered. The Court rejected the plaintiff's invitation to revisit Lehmann, noting that the plaintiff had 30 days to read the order and determine that it erroneously stated that it disposed of all claims and all parties.

No. 17-0231, Schlumberger Tech. Corp. v. Pasko — In this personal injury case, the Court addressed the application of the discovery rule. The plaintiff was injured by exposure to caustic chemicals at an oil well site. Within two years of the exposure, he sued several defendants. More than two years after the exposure, he added claims against Schlumberger. He claimed that in addition to the immediate injuries caused by the chemicals, he had also developed cancer. The trial court granted summary judgment based on the statute of limitations. The court of appeals reversed, applying the concept of "latent occupational disease." In a per curiam opinion, the Supreme Court held that the court of appeals erred in applying the "latent occupational disease" framework because the initial exposure caused immediate injuries and the framework applies only where the plaintiff does not and cannot immediately know of the injury or its cause. Under the transactional approach to accrual, the fact that the cancer was diagnosed later does not change the result. The Court also held that the evidence conclusively established that, on the day the injury occurred, the plaintiff was aware of Schlumberger's involvement. Therefore, the Court rendered judgment that the claims against Schlumberger are time-barred.

No. 17-0395, In re Garza — This mandamus petition arises from a discovery sanction in a personal injury case pending in Jim Wells County. When the defendant sought discovery from some of the plaintiffs' medical providers, the plaintiff sought a protective order, but that relief was denied. The medical providers are not parties to the underlying case and did not participate in the hearing on the plaintiffs' motion for protection. When the defendant served subpoenas on the medical providers in Bexar County, the providers filed their own motion for protection, which the Bexar County court granted. The court in Jim Wells County then granted a motion to exclude any testimony by those medical providers. In a per curiam opinion, the Supreme Court granted mandamus relief, finding that the trial court abused its discretion in excluding the evidence because the medical providers simply exercised their rights to seek protection and there was no evidence that the plaintiff was involved in the providers' refusal to produce records.